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Scrap collectors of Ukraine are surprised by the statements about the deficit of scrap metal at the factories

Ukraine / Ferrous metallurgy
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Scrap metal producers and representatives of the metallurgical business argue about the need for a complete ban on the export of steel raw materials against the background of high world scrap prices.

Scrap collectors of Ukraine are surprised by the statements about the deficit of scrap metal at the factories

According to the UkrMet company, at the beginning of June, the stocks of scrap metal in the warehouses of Ukrainian steel plants amounted to about 300 thousand tons, which is 3 times higher than the standard value. In this regard, the company is surprised by the statements of the representatives of the metallurgical lobby about the lack of scrap in the country.

“Metallurgical plants do not have time to consume the volumes of raw materials that they themselves buy. It is difficult to understand how against this background one can speak of a shortage of scrap. Further dynamics of the domestic scrap collection market depends on the situation in the global steel market, which will have a positive environment at least until the end of the year, "says message UkrMet.

Oleksandr Kalenkov, President of the Ukrmetallurgprom Association of Enterprises, spoke about the shortage of scrap metal at Ukrainian factories, according to whom today metallurgical enterprises are already facing problems, since they are forced to increase the cost of purchasing raw materials.

“This is a very bad trend. If it is not stopped, then we will come to the conclusion that costs will increase even more and put pressure on the cost price, and scrap stocks will decrease to critical values, ”Kalenkov said, recalling that a number of enterprises operate in Ukraine, which, in conditions of a lack of raw materials forced to stop smelting steel.

In the context of growing exports, representatives of the metallurgical business started talking about the need to introduce a temporary ban on the export of scrap metal. This is in addition to the extension of the export duty of 58 euros per tonne for another 5 years.

“There are two ways to solve the problem. The first one is to adjust the amount of the fee by amending the relevant law. The second is to make a decision, perhaps even at the National Security and Defense Council, to temporarily ban the export of scrap in general. Because the situation is critical from an economic point of view. This harms our state, the trade balance and budget revenues, "Kalenkov said.

"We fully support the extension of the export duty, and would also support its increase, or even a ban on the export of scrap," said Maksim Berezin, a representative of the DMK.

Due to the positive situation on the metallurgical market of Ukraine for 5 months from the beginning of this year, the key indicators of the domestic scrap market have grown significantly. Scrap collection increased by 35% - up to 1.57 million tons, scrap supplies to metallurgical plants - by 22.6%, up to 1.35 million tons.

Since the beginning of February, the difference between world scrap prices and domestic prices has been much higher than the level of export costs. They are $ 110 per tonne and are spent on payment of duties, transportation and port transshipment.

This opened up an opportunity for large-scale export of this metallurgical raw material. In May, external deliveries amounted to 59.3 thousand tons, which is almost twice as much as in the entire last year, when this figure was 36 thousand tons. In total, in January - May 2021, the export of scrap metal from Ukraine increased 8.9 times - up to 146.3 thousand tons.

In an attempt to slightly reduce the difference between world and domestic prices, Ukrainian scrap consumers in the second half of May raised purchase prices to UAH 8,000 per ton. At the same time, for a significant part of May, world prices did not fall below $ 500 (approximately UAH 13,500) per ton, which left a window of opportunity for exports. What a part of the operators of the scrap collection business actively used.

Today, there is a tendency in the world to toughen the export regime for scrap metal purveyors. For example, since the beginning of the year, Russia has twice raised the duty on the export of steel scrap - first from 5 to 45 euros, and then to 70 euros per ton. The Eurasian Economic Commission is preparing a decision that will allow introducing a ban on the export of ferrous scrap outside the Union until 2022. In addition, a temporary ban has already been introduced in Kazakhstan, Argentina, Armenia, UAE, South Africa.

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